The Death of an Industry?

By Michelle Okereke13 April 2012

The revolution of the Internet marks a new era in entertainment. With a limitless supply of media available on the web, a widespread belief has emerged that its rise means the destruction of the film industry. There is no denying that the Internet has transformed film, but studios have begun to adapt and in the future, they will perfect the formula for using the Internet as both a marketing tool and a venue for viewing.

History Repeating

The story is a familiar one. One product dominates the market until a newer, cheaper, and more convenient one swoops in and steals consumers. For the film industry, it is an all too familiar story. 100 years ago, film was the cheapest form of entertainment one could buy. Essentially, it was the only form of entertainment that could be enjoyed on a regular basis for a reasonable price. During the “Golden Age” of Hollywood, studios made exorbitant amounts of revenue with little fear of their audience disappearing. This has changed tremendously. Consider the following fact: Avatar (2009), the highest grossing film of all time, sold half as many tickets as Gone with the Wind(1939), the highest grossing film adjusted for inflation, despite the fact that America’s population more than doubled in that 70-year time frame. However, the biggest drops in theater attendance did not come with the emergence of the Internet. They stem back to the 1940s. When the FCC allowed television stations to feature advertisements, producing more shows suddenly became popular. This fact combined with the rise of suburbs (far away from the urban centers where movie theaters were located) made television a more viable substitute for film. As far as studio executives could foresee, this meant the death of film.

While it is clear that television has irrevocably damaged the attendance films, I posit that film is not dead. At first, the film industry tried its best to fend off television. Technologically, color motion pictures and wider screens became more prevalent, in hopes that the distinctiveness of the film-going experience would attract audiences. Strategically, studios began to release fewer films with bigger budgets, hoping that better quality would draw bigger crowds. Ultimately, these attempts failed to halt the momentum of television. Eventually, Hollywood came to the realization that enemies are best kept close. Soon studios and networks forged a collaborative relationship. Today, networks sometimes buy the rights to play a film before it is even released in theaters. Not only does television represent a substantial part of a film’s ultimate revenue, it also serves as an unparalleled marketing tool. Audiences watching television regularly view TV spots for upcoming films and talk shows are the first stop for actors on a promotional tour. With the growth of television, more people watched more movies than ever before…that is, until the World Wide Web exploded.

Adaptation, or Signs of Desperation?

The rise of YouTube and file sharing software has transformed the Internet from an information highway into a bottomless barrel of entertainment. Television was a cheap alternative to film. For the immense amount of access you get for the purchase of one laptop and an Internet browser, the Internet is an essentially free andmobile alternative to film and television. TV schedules have lost all meaning. What matters now is when a show comes online. Television has probably suffered more from the Internet than film, so it has been quick to make adjustments. Now, many networks upload episodes to Hulu or to their own site within a few days of their premieres. The only problem is that these same episodes are uploaded to file sharing sites within hours of their premieres. Even if viewers do watch a show legally, they are likely to jump to other tabs during advertisements or install ad blockers to avoid seeing them all together. This makes online streaming inherently less valuable to advertisers than television.

How has film adapted to compete in this infinitely expanding market? The rise of online entertainment, coupled with the economic downturn a couple of years ago has left studios vulnerable. Movie studios seem to have adopted a similar strategy to the one adopted to fend off television—distinguish the theater from the Internet by depicting films as must-see events. Technology, movie release schedules, and the recycling of familiar material have been the major tactics for accomplishing this goal. Increases in video quality, aided by a gradual conversion to digital film, appear to contribute positively to the movie-going experience. Other technologies—3-D being the most recognizable example—are constantly denounced by critics and the general public alike as being unnecessary and even detracting from the movie experience in some cases. Avatar’s success has given the format some legitimacy (good when done right, which rarely happens), leading to an unprecedented number of 3-D releases. For animated and adventure films, a 3-D release is almost a requirement. Action, thriller, and horror films are increasingly converted to 3-D in post-production, as well.

The calendar of movie releases has also changed dramatically. More movies are released now than ever, but with shorter lives. Avatar made over 700 million over the course of three or four months, and this is long by current standards. Nowadays, two or three months are expected for a popular release. Compare this to Titanic (1997), which made 600 million over the course of about a year. This would never happen today. Interest for any given movie is just too fleeting.

There is also concern that the quality of these releases is not the same. Studios still pour unheard of amounts of money into blockbuster films, but these big films tend to look very similar. In order to ensure that a film will be seen, studios seek out films with an established fan base. This year alone provides evidence of this--The Hunger Games, adapted from a popular franchise (filling the book series-to-film vacuum left by Harry Potter, and soonTwilight); The Vow, yet another film adaptation of a popular Nicolas Sparks novel; Total Recall, a remake of a 1980s action film; The Avengers, the follow up to a series of five Marvel comic inspired films released over the last four years; and The Amazing Spider-man, a reboot of the Spider-man franchise that ended just five years ago. These are not necessarily bad movies. Many in fact are very good. Ultimately though, they prevent more risky and original films from being made. Hollywood’s addiction to big budget franchise films with high returns is compounded by the fact that these films tend to play well overseas. Ultimately, this may be the film industry’s greatest saving grace. Even if returns start to plunge within the US, markets for films are constantly opening up overseas. Returning to our Avatar example, the film made 2 billion dollars overseas, for a total of 2.7 billion. There is no way to adjust this for inflation, but I can definitively say that this would not be possible even ten years ago.

So far, the picture I have painted has been one of the film and television industries fighting the Internet at every turn. But has the Internet come with any advantages for the entertainment industry? Film managed to forge a partnership with television. Will it do the same with the Internet? Has it begun to already?

Communicating Film on the Web

The Internet has completely reshaped the way film and television are communicated to their audiences. For a big budget film, it is impossible to go a few weeks without a photo or video from the shoot popping up on the Internet. Sometimes these shots come from paparazzi, but more often, they come from an average person, who was lucky enough to stumble on set and was smart enough to take out their phone and push send. When these images come up online, there is no way to get rid of them. News spreads fast.Studios have begun to use the rapidity and permanence of news to their advantage, and will continue to do so in the future, with even more efficiency. Public relations reps have already begun to use “leaks” to their advantage. Information on upcoming projects are leaked, photos are leaked, trailers are leaked—all with the end result of creating more buzz and discussion around an upcoming film.

Five years from now, no leaks will be unintentional. If a bit of news or media arrives online earlier than expected, assume it is the work of the production’s marketing team. In general, marketing for films will completely transform. Viral campaigns will become the most important tool in a studio’s arsenal. Trailers will become more important than ever before. With about ten major trailers being released on a weekly basis already, a trailer must stand out to grab a viewer’s attention. We have already observed a change in the significance of trailers. When a trailer hits the web, it is an event. It is shared all over Facebook, tweeted and retweeted on Twitter, and analyzed painstakingly in the comments section of movie fan sites. In the near future, trailer releases could garner more excitement than the movie release. Trailers will be advertised before their official release. This year alone we have already seen this occurrence—there have been trailers for the teaser trailers of Looper, Total Recall, Breaking Dawn Part 2, Prometheus, and even a 15 second trailer for the Avengers’ 30-second Super Bowl ad. As redundant as this may seem, it garners more views for the actual trailer. It is safe to assume that this will become a more widespread phenomenon.

Accessibility for Indie Filmmakers, Variety for Viewers

In light of the Internet age, what can viewers ultimately expect from cinema in the coming years? As with many fields affected by the Internet, they can expect to be more informed. We’ll be exposed to every trailer, and know every detail of the plot before passing through the theater doors. The outcome of the Internet for film studios is not necessarily bad, given the marketing potential for domestic and foreign consumers alike. But is the outcome for movie fans really as dismal as an endless stream of 3-D slashers, big budget sequels, and trailers for trailers?

For those of you worried about the shrinking market for lower budget films, there is hope! While blockbusters may pack the theaters, independent films will be strewn across the web. Sites like Hulu have already begun to have original programming. The next step is for sites to host original full-length films. This means endless possibilities for independent filmmakers and greater variety for viewers. Here, we see the “long tail” of the Internet in action. A larger entertainment market allows for a greater variety of film. Even the most obscure genres will find an audience on the web. Film studios will take advantage of this feature of the Internet by diversifying. They will produce lower budget, original films and have divisions set aside for acquiring a greater variety of independent films to be posted directly to the web. With a lower budget and almost no distribution costs, studios will be able to charge viewers a low price for these films and still receive substantial revenue.

Wounded, but Not Dead

When television arrived, critics predicted that film would die. These predictions failed to come to fruition. Rather, the industry adapted and formed a symbiotic relationship with television. In this new era in entertainment, film will adapt once again, permeating the Internet for the benefit of both parties.